Dairy Breeding Programs May Help Keep Beef Affordable

With beef in short supply and prices rising drastically, the beef industry is starting to get a little help ... from the dairy industry, according to Richard Williams, ABS Global general manager for North America.

"Quality beef crossbreds from dairy cows offer benefits throughout the supply chain, from dairy farmers, to beef cattle feeders, meat processors, retailers and consumers," said Williams, while speaking at the 67th Reciprocal Meat Conference. The American Meat Science Association conference brings together commercial, academic and government segments of the meat industry. This year's event celebrates the 50th anniversary of the formal incorporation of AMSA, which was founded at the University of Wisconsin - Madison.

"Demand for beef is outpacing supply, and all indications point to beef prices remaining high," said Williams. According to the USDA, the U.S. beef calf crop has declined in 14 of the last 16 years, from a high of more than 35 million in 1996, to less than 30 million in 2012.

"Because of drastic reductions in the beef cow herd, dairy cattle bred to beef bulls may help offset shortages in the beef supply chain. Dairy cull cows and bull calves have long found their way into the beef supply chain. Now, quality beef crosses from dairy cows are hitting the market and proving they can compete for growth, efficiency and quality with conventional beef product," he added.

"Dairy industry changes, economics and advanced artificial insemination technologies - such as sorted semen - are increasing interest in cross breeding high-quality beef bulls with dairy cows," said Williams. "The dairy industry is waking up to the opportunity."

Since 2002, the number of dairy herds has fallen by 27 percent, to 47,000, but milk per cow has increased by 17 percent, to 21,822 pounds per year. The increases can be attributed to several factors, including genetic improvement, animal health practices and better feeding.

However, volatility in the marketplace has focused more dairy farmers on profitability than ever before. Cash flow and working capital have become more important metrics following an extreme downturn in 2008/09, and again in 2012, when a nationwide drought drove feed prices to levels that drove many dairies out of business.

In the U.S., more than 70 percent of dairy cattle are bred through artificial insemination, mostly with genetics from within dairy breeds. Typically, they produce a 50/50 mix of male and female offspring. Only a small proportion of female offspring are needed as replacements for aging milk cows, with the remainder raised for beef.

However, dairy breeds typically lack many of the physical qualities desirable in beef animals. Dairy breed calves being channeled into the beef supply chain were often sold at low prices, sometimes even at a financial loss.

Technologies such as sorted semen, which results in about 90 percent female offspring, now are being used to breed the best dairy cows to provide replacements.

"Breeding the remaining animals with beef bulls results in offspring with better beef characteristics. There is a significant incremental value opportunity by cross-breeding dairy cows with elite beef genetics," said Williams.

For dairy operations, this management practice brings both animal welfare and economic benefits. Calving is easier; calves are healthier; and the resulting offspring from cross-breeding bring higher value in the marketplace. Also, breeding the very best cows using sorted semen can create more rapid genetic improvement within dairy herds.

Beef cattle feeders benefit by having cattle with faster growth and a more desirable consumer product. They also have a more consistent, year-round supply of animals, and improved supply chain traceability.

ABS is helping both the dairy and beef segments through its InFocus program. ABS Dairy InFocus involves the strategic use of proven beef sires on dairy cows within a comprehensive breeding plan. InFocus enables dairies to increase cash flow and improve future herd genetics. Lower performing cows are bred to beef and calves are sold at a premium. Top-performing cows are used for more desirable heifer replacements. ABS has regional relationships with calf growers and feedlots looking to buy InFocus calves at premium prices over the dairy bull-calf market.

Meat processors also benefit from year-round availability, traceability, and a better yield of meat from high-value cuts than what would come from typical dairy animals.

"Ultimately, retailers and consumers benefit," said Williams. "They're getting great dairy and beef products, and the added supply helps to keep prices in check."